Globalization and Sustainability in Supply Chain Management, Exams of Advanced Education

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Exam 4 - SCM 300 Questions and

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Global profit motivations Companies want to maximize profit; profit is equal to revenue minus cost. So, as a company considers globalizing its supply chain, both revenue and cost issues must be considered Global brand strategy As companies expand their supply chains globally, especially to new consumer markets, these companies must be prepared to deal with differences in:

• Packaging laws
• Accepted packaging conventions
• Environmental requirements
• Different distribution and retail systems
• Different consumer tastes and needs
• Laws that impact truck size
• Label requirements Brainpower Read More Intellectual property Refers to copyrights, patents, trademarks and other designations that protect the creative ideas of a company, an artist, or other creator of goods, ideas and other output Benefits and Risks of External Partners Benefits -

1. Speed
2. Expertise
3. Resource Utilization

4. Focus on Core Competencies Risks -
5. Quality Control
6. Intellectual Property
7. Business Practices
8. Loss of Strategic
9. Loss of Strategic Flexibility Offshoring A strategy where a company moves manufacturing out of its "home" country to another country Outsourcing When a company contracts an outside firm to perform services, operations or business processes that could be or were previously performed in-house Offshoring and Outscourcing A strategy where a company utilizes a contractor in another country to perform services and/or operations Contract Manufacturers A company that produces goods on behalf of another organization Near-sourcing refers to a type of offshoring or offshoring and outsourcing where the location of the manufacturing facility is relatively close to the location of the consumer Manufacturing Compliance The business behaviors of a manufacturer associated with following the regulations, practices and other requirements that their clients have established Manufacturing Audits

A process whereby companies examine whether or not their manufacturing contractors are abiding by the legal and agreed upon regulations, business practices and other established manufacturing requirements Currency Exchange Rate Considerations It takes time to buy supplies, manufacture products and move them to their final destination. In a global supply chain, time means money Infrastructure Refers to the physical structures and equipment utilized to move goods Customs and Regulations Considerations Governments establish customs agencies to control the goods that enter and leave a country, i.e. imports and exports. These customs agencies monitor whether importers and exports are adhering to the customs regulations established by the government Customs-Trade Partnership Against Terrorism (C-TPAT) A voluntary program developed by US Customs and Border Protection for companies importing goods into the US. The program requires member organizations to report a significant level of detail related to supply chain partners and actions for each imported shipment Third-Party Logistics Company A contractor that performs one or more logistics functions for their client in an effort to facilitate effective and efficient movement in the supply chain. This third-party contractor can neither be the buyer nor the seller of the items being moved Freight Forward A contractor that helps companies organize the efficient and effective shipment of goods from one point in the supply chain to another. Freight forwarders do not actually transport the goods, instead they negotiate and arrange for one or more logistics companies to prepare, secure, store, track and move the cargo Customs House Broker A contractor (company or person) that helps a client's goods clear customs in a foreign country Free Trade Zone (FTZ)

A geographic area sanctioned by the government where items are not under the control of customs authorities. As such, goods can be imported into a country, brought into an FTZ and then stored, displayed and/or manipulated before being re-exported without ever being inspected or taxed by customs officials Incoterms A series of commercial terms, often depicted as three letter acronyms, established by the International Chamber of Commerce (ICC) to facilitate communication in commercial transactions. These terms provide clarity on issues of shipment responsibility, ownership, export and import responsibilities, and cost Shipping Documentation Documentation serves three very important purposes:

1. Transportation - Documents are proof that cargo was received, where it originated, where it is going, and it can also represent a binding contract between different supply chain parties
2. Financial - Whenever cargo changes hands it is considered a crucial
3. International Shipments - When goods cross borders, customs officials look to shipping documentation to check for legal infractions and also to assess duties Commercial Invoice A vital document that provides a reasonable summation of the items being shipped, the parties involved, cargo values, and other information important to supply chain members and customs officials Packaging List Describes all items in a box, including dimensions and weight. In some cases it may even provide location of items in a box or container. prices are typically not provided on a packaging list Bill of Lading Serves three main purposes: Contract between shipper and carrier, receipt of goods for the shipper and it acts as the certificate of ownership Shipper's Export Declaration

A document used by the US government to track all items that exported from the US in order to develop a census of US exports each year. It also provides the appropriate export license information for the goods being shipped Validated Export License A special export license required for items that are heavily policed by the US government, such as weapons, advanced technologies, goods related to nuclear technology, and even goods related to the agricultural industry Certificate of Orgin Certifies that the goods were in fact manufactured in the country specified. Important for legal purposes and to assess duties EMS industry & benefits COmpanies that can take on numerous primary supply chain responsibilities associated with the manufacturing of electronic components assembled end-items. Exploit economies of scale in the manufacturing of electronic devices. Similar parts, processes, designs, techniques, channels of distribution In-sourcing Local and within company Duty Drawbacks Utilized when an item is imported and then re-exported

• Typically 90%+ return of tariff
• Why would this happen? Display Items, Layovers...
• Example: NASA Telescopic Lens/Mirror US Exporting Basics Art of International Commerce examples Domesticating Products : Meet minimum domestic part requirement to make foreign item domestic Creative Importing : Importing a used Japanese sports car not presently sold in the US. What are your options?
• Third party importer

• Ship whole as unassembled parts
• Ship only the required parts Altering the product in order to reclassify the items: SUVs Corporate Social Responsibility (CSR)

1. Legal and Ethical Behavior - Acting within the law of all the countries in which they conduct business. It might also include treating stakeholders well
2. Sustainability - Being aware of and supporting or improving Earth-friendly business practices within the company. This includes having business practices, products and services that do not harm the environment in the present nor in the future
3. Commitment to the Community - Investing in the well-being of the communities in which the business operates as well as the greater world Reasons to be Socially Responsible
4. Avoid Government Fines and Regulation
5. Seek Positive Public Image
6. Demonstrate Company Goals and Values
7. Protect the Company's Interests Links between SCM and Social Responsibility
8. Eliminate Waste
9. Legal and Ethical Business Practices
10. Improve Quality of Life Challenges of Being Socially Responsible
11. What's the Right Thing to Do?
12. Monitoring Supply Chain Partners (and Yourself)
13. Tracking Outcomes Across the Supply Chain Tools for Managing an Ethical Supply Chain
14. Continuous Education and Awareness Programs
15. Security Across the Supply Chain
16. Establish a Whistleblower Program
17. Monitoring and Auditing Programs

SA

Developed by Social Accountability International, SA8000 is certification that focuses on social responsibility in the work place. May be of value to companies seeking the approval of customers and/or present and prospective supply chain partners.

• Child labor
• Health and Safety
• Discrimination of any type
• Payment/Compensation - Fair and legal pay. Workers are provided a living wage.
• Unionization Rights - Freedom to form and join labor unions and also the right to collective bargaining
• Forced labor - Includes prison labor. Organization does not motivate employees to stay by withholding payment or driving workers into debt.
• Disciplinary practices - Fair treatment of all workers. No mental or physical punishment. No abuse of any type.
• Working hours - Abides by laws of the state. Also complies with work weeks of no more than 48 hours. No more than 6 consecutive days of work.
• Ethical Management Systems- Being a complaint organization is not enough. Companies must have a standardized system that supports and nurtures a social responsible work place." Sustainability Development that meets the needs of the present without compromising the ability of future generations to meet their needs Triple Bottom Line Companies should consider the possible economic, environmental, and social outcomes associated with business decisions Reduce, Resue, Recycle Rather than have everything end up in a landfill as garbage, companies should consider ways to conserve materials and energy, maximize the use of their resources and find new uses for items that are no longer valuable

Cradle to Grave Design vs Cradle to Cradle Design In the past, items were designed to be purchased and used for some purpose. Little if any thought was devoted to what would happen when the item was no longer useful. This was cradle to grave design. All items were destined for landfills. Closed Loop Supply Chains Utilizing the idea of cradle design, this extends the same concepts to supply chain. Supply chains that seeks to create a loop of materials through sustainable procurement, manufacturing, logistics and reverse logistics Challenges of Being Sustainable

1. Motivating Supply Chain Partners
2. CUstomers Want Things That Last
3. Local vs. GLobal Management
4. Lack of Understanding
5. Metrics
6. Managerial Support How Supply Chains Can be More Sustainable
7. Procurement - Purchasing better materials, fewer materials and safer materials
8. Logistics - Transportation efficiency and reduce fuel consumption
9. Manufacturing and Operations Facilities - Energy consumption, defect reduction and minimize emissions
10. Reverse Logistics - Recovery of packaging, damaged items, parts, etc. for reuse, refurbishing
11. Supply Chain Sustainability Catalysts - Large, Powerful companies can become catalysts and often have the power to motivate thousands of suppliers to become sustainable
12. Rethink Design - Poor design will always yield poor outcomes. Sometimes companies need to start from scratch and develop a new design
13. Sustainability Accounting - Companies cannot fix a problem until they can find the source. With the help of accounting, supply chains can identify primary areas of costs related to unsustainable business practices
14. Develop Sustainability Metrics
15. Life Cycle Analysis ISO 14000 A series of certifications offered by the International Organization for Standardization in the Area of sustainable business practices and management

Humanitarian Supply Chain Management

1. Securing Supply Chain Partners - Typically, they are looking for suppliers with a track record
2. Investment in Prevention - Even when all is well, humanitarian organizations are working to improve infrastructure, provide vaccines, educate, etc. in an effort to prevent or mitigate the impact of possible future disasters in the most vulnerable locations End of Pipe Solutions Solutions geared at dealing with the outputs of traditional supply chains. Disposal, recovery, recycling Humanitarian and Global Health Supply Chains
3. Logistics Challenges - Poor/Devastated Infrastructure
4. Procurement Challenges - Low cost, Financing, and Negotiations
5. Process/Operations Challenges - Culture, Technology
6. SCM Talent Pool - Who is working in these organizations
7. No single SCM Solution - Every location poses new challenges
8. Not Just One Problem, Multiple Problems
9. Broken Communication, Lack of Coordination
10. Media and Social Media Coverage Social Responsibility Basics (Issues)
11. Money is important
12. Regional Solutions - Western solutions won't work everywhere
13. Innovation - Opportunities for corporate improvement
14. Media and Special Interests - The price you pay for saying you are socially responsible
15. Impact on stakeholders - Customers, employees, supply chain partners Cradle to Grave Design Designing products and services with only the useful life of the product/service and its materials in mind. Manufacture to disposal. Cradle to cradle Design Ecologically intelligent design that considers not only the useful life of the product but also the recovery, disposal, and reuse of the materials and components that make up the product